Fiscal Cliff and farm woes
GREENSBORO, N.C. — Negotiations continue today, as Congress tries to avoid the so-called fiscal cliff at the end of this year.
If a compromise is not reached there will be budget cuts and tax increases across the board.
Local farmers say the uncertainty is worrisome.
“Where we are in Guilford County, we may not be farming in ten years,” said fifth-generation farmer Andy Clapp.
“We love to farm, we want to do it, but everything is up in the air.”
Federal leaders are working on the Farm Bill a part of the fiscal cliff deals.
Without an agreement over the Farm Bill in Congress, there will be major changes in estate taxes.
Currently, the value of a family farm up to $5 million is exempted from estate taxes.
Without an agreement on the Farm Bill, estate taxes would apply to farms worth more than $1 million.
Any amount over $1 million would be taxed 55%.
“Just in Guilford County alone, I believe that’s 138 farms that will be affected by the estate taxes,” explained Clapp.
High Point University Economist Dr. Daniel Hall said the Farm Bill originated to protect and help small farmers in the Dust Bowl era.
“Right now, we actually have a fiscal fiscal cliff within a fiscal cliff for all the farming industries,” he said.
“Basically, the Farm Bill is crop insurance and various subsidies to help farmers stay profitable during tough economic times,” he continued.
Dr. Hall said the Farm Bill also provides for programs like food stamps. But the government will have to make cuts somewhere.
“They have their sights set on the Farm Bill because it has a lot of subsidies in it, and subsidies cost taxpayers money.”
N.C. Agriculture Commissioner Steve Troxler told Fox8, “The clock is ticking. We’ve got to see some action and some effective policies when it comes to agriculture.”
He said as a farm owner himself, the estate tax changes are especially troublesome.
Dr. Hall concluded, “It’s a tough pill to swallow.”